In 1966, 46% of workers in Australia were employed in production industries. Now, 30 years later, that proportion has diminished to 28%.

Industry and occupation classifications

The classification of occupations and industries in the review is based on standard ABS classifications. However, analysis is limited by changes in those classifications. The Australian Standard Industrial Classification (ASIC) was introduced in 1969. Since then, the changes in industrial structure, described in this review, have led to the obsolescence of that classification system. Consequently, in 1994, the Australian and New Zealand Standard Industrial Classification(ANZSIC) was introduced. This classification system provides more detailed information on the service sector, but the time period for historical analysis is limited because only data from 1984 onwards have been re-classified.

The Australian Standard Classification of Occupations (ASCO)(First Edition), used in this review, was introduced in 1986. This classification system is based on the kind of work done, defined in terms of skill level and skill specialisation. The skill level of an occupation is a function of the range and complexity of the tasks performed. Skill specialisation is a function of the knowledge required, tools and equipment used, materials worked on and goods and services produced in relation to the tasks performed. At the broadest level of the classification there are eight major groups disaggregated primarily according to skill level. In May 1996 a second edition of ASCO was introduced. This edition refines the definition of skill levels and places an increased emphasis on occupation entry requirements.

Over the past few decades the Australian labour force has changed substantially. The shift in labour demand arising from new technology, microeconomic reforms (such as tariff reductions, industrial relations reforms and changes to standards and regulations) and internationalisation of product markets have all contributed to this change. Another factor affecting the demand for labour has been the adoption of new management strategies that emphasise work force flexibility, particularly increased use of part-time and casual employees. Employment has grown significantly in the service sector,particularly in the property and business division and the accommodation, cafes and restaurants division. On a smaller scale, changes in home life have led to an increased demand for services to replace in part those traditionally carried out within the home, such as child care and meal preparation. Along with this growth in the service sector there has been a decline in employment in production industries like manufacturing and mining1.

In addition to changes in the relative shares of people employed in different industries, changes in processes and products within industries have led to a shift in the sorts of jobs that employers now offer. These jobs generally require employees with a greater level of skill. Technology has been one of the main agents of change. Computerisation, mechanisation and automation have been incorporated into the work place with the common result of reducing the need for labour and creating new types of jobs1.

Another major influence on industrial restructuring has been government economic policy. Generally, the Australian economy has always been vulnerable to the world economy, particularly to commodity prices and overseas competition. For most years since the early 1970s Australia has spent more on importing goods and services than it has earned from exporting them (known as a goods and services deficit). This led to government economic initiatives in the 1980s aimed at creating a more efficient and less sheltered manufacturing sector that could earn export dollars. These initiatives included gradual cutting of tariffs, floating the Australian dollar, liberalisation of foreign investment and allowing foreign banks into Australia2.

PROPORTION OF ALL EMPLOYED PEOPLE IN THE PRODUCTION AND SERVICE INDUSTRIES

In this review most of the industry information is presented at the broad division level of the ANZSIC industry classification. The use of divisions only is a simplification since some of the production industries have service components which, for this review, are ignored.

The decline of employment in production industriesIn 1966, 46% of all employed people in Australia worked in production industries: on the land or sea, down mines, in the factories or on building sites. Now, 30 years later, that proportion has diminished to 28%. During that 30-year period nearly all employment growth has been in the service sector, which increased from 2.6 million to 6.0 million workers. The number of workers in production industries remained at between 2.0 and 2.5 million. The production industries were, and still are, mainly the reserve of men working full time. Overall, women occupied 23% of production industry jobs in 1995-96, only 1.5 percentage points more than in 1985-86. In comparison, women occupied 43% of jobs overall in 1995-96, four percentage points more than in 1985-86.

Manufacturing has been the major employer among production industries since the 1940s. However, by the mid 1970s employment in manufacturing started to decline. The main cause of this was a slowing of growth due to the world-wide effects of the rise in oil prices in 1973-74. At the same time new social reforms, wage rises, and a devaluation of the dollar saw a great increase in the rate of inflation. These changes affected all sectors of the Australian economy, particularly manufacturing, which had to face increasing competition from the newly industrialised countries of Asia3.

Australian manufacturers had been protected from international competition by high tariff barriers since federation. However, by the mid 1960s this was increasingly seen as a retrograde policy that was leading to inefficiency and stagnation. The need for reform led to government economic initiatives in the mid 1980s that included gradual cutting of tariffs and liberalisation of foreign investment. These were intended to create a more efficient and less sheltered manufacturing sector that could earn export dollars2.

Since 1985-86 the overall number of people employed in the production industries has remained relatively static at about 2.3 million. During the period 1985-86 to 1995-96, the construction industry grew, gaining about 123,000 workers (26% growth). This growth largely offsets the declines experienced in the other production industries. The greatest reduction in employment occurred in the electricity, gas and water supply industries where the number of workers decreased by 63,300, a decline of 44%.

During the period 1985-86 to 1995-96 overall employment in manufacturing industries continued to decline. The number of workers employed decreased by 1.5% (17,400 workers). The largest percentage decline occurred in the textiles, clothing, footwear and leather industries, the core manufacturing industries in the early part of this century. Employment in this group declined by 18% (22,200 workers) between 1985-86 and 1995-96. Employment in machinery and equipment manufacturing also declined, by 10% (26,300 workers). The greatest percentage gain in workers, 25% (16,100 workers), occurred in the non-specific group of other manufacturing which includes the manufacturing of prefabricated buildings and furniture. The only other manufacturing groups to increase their employment levels were printing, publishing and recorded media manufacturing (14% increase, 13,200 workers) and food, beverages and tobacco manufacturing (12% increase, 19,500 workers).

EMPLOYED PEOPLE BY INDUSTRY 1995-96 AND CHARGE SINCE 1985-86

1995-96

Change between 1985-86 and 1995-96

Employed people

Employed people

Percentage change

Proportion working part time

Proportion of workers female

Industry division

'000

'000

%

% points

% points

Production industries

2,299.7

15.8

0.7

3.4

1.5

Construction

600.3

123.0

25.8

3.3

1.4

Agriculture, forestry, and fishing

421.9

-6.0

-1.4

3.7

2.6

Manufacturing

1,111.4

-17.4

-1.5

2.7

0.8

Mining

85.3

-20.5

-19.4

1.5

1.9

Electricity, gas and water

80.8

-63.3

-43.9

1.9

8.5

Service industries

5,987.5

1,421.9

31.1

6.5

3.3

Property and business services

795.8

344.1

76.2

3.9

2.2

Accommodation, cafes and restaurants

380.6

152.3

66.7

2.9

-0.1

Cultural and recreational services

187.6

60.9

48.1

6.2

2.5

Personal and other services

314.9

93.5

42.2

2.2

-4.6

Health and community services

757.0

185.8

32.5

7.4

2.5

Retail trade

1,226.8

279.0

29.4

10.7

0.6

Education

584.7

132.4

29.3

2.0

5.0

Wholesale trade

499.1

73.2

17.2

2.8

2.9

Government administration & defence

378.7

48.4

14.7

4.0

5.8

Finance and insurance

315.6

21.2

7.2

6.2

5.4

Transport and storage

388.3

24.4

6.7

4.1

5.3

Communication services

158.4

6.7

4.4

4.5

6.6

Total

8,287.2

1,437.7

21.0

6.3

4.2

Source: Labour Force Survey (unpublished data).

The growth of employment in service industriesThe growth of employment in the service sector is not a recent phenomenon. The sector has grown steadily throughout the century, from about 50% of employment in the early part of this century3 to 72% in 1995-96. This pattern of growth is also found in other industrialised countries4. Factors contributing to this growth include the increase in part-time and casual work and the increase in services that replace work previously done in the home, such as child care, cleaning, gardening, maintenance, food preparation etc. Another important influence has been the recognition that many sectors of the service industry have the potential to earn export income5. For example, there has been vigorous promotion of Australia's tourism and education industry. (see Australian Social Trends 1995,Overseas students, and Travel and tourism).

Between 1985-86 and 1995-96 the number of workers in the service industries increased by 31%, an increase of 1.4 million jobs. The service industries employed slightly more females than males (51% female in 1995-96). Overall, part-time work was more common in service industries, with 29% working part time compared to 13% in production industries. However, part-time workers were not evenly distributed across all service industries. There were higher concentrations in industries such as accommodation, cafes and restaurants (45% part time) and in the retail trade (42% part time). Increased employment in the service sector has been the major impetus to the recent growth in part-time employment, particularly among females (see Australian Social Trends 1994, Trends in part-time work).

The service industry with the highest employment growth was property and business. The number of workers in this division grew by 76%, an increase of about 344,100 (this division includes services such as property operators and developers, real estate agents, technical, computing, legal, accounting and marketing services).

The second fastest percentage growth (67%, 152,300 more workers) occurred in the accommodation, cafes and restaurants division followed by the cultural and recreational services division (48%, 60,900 more workers). Although the retail trade ranked sixth in percentage growth (29%), it ranked second in the actual number of new jobs, 279,000.

Blue and white-collar occupations

Blue-collar occupationsin this review refer to the following major groups of the Australian Standard Classification of Occupations: tradespersons; plant and machine operators, and drivers; and labourers and related workers. These major groups are predominantly associated with trades and lower-skilled jobs that are often physical.

White-collar occupations in this review refer to managers and administrators; professionals, para-professionals; clerks; sales persons and personal service workers. These major groups are predominantly associated with higher education and specific skills or with lower-skilled jobs that are mainly social rather than physical.

PROPORTION OF BLUE-COLLAR WORKERS IN EACH INDUSTRY

1986-87

1995-96

Change(a)

Industry division

%

%

'000

Agriculture, forestry, fishing and hunting

70.9

69.9

22.2

Mining

72.5

67.7

-16.3

Manufacturing

70.6

65.7

-71.2

Electricity, gas and water

59.8

44.7

-43.2

Construction

74.6

72.6

25.7

Wholesale trade

33.3

32.3

18.1

Retail trade

30.2

29.7

68.7

Accommodation, cafes and restaurants

39.2

40.1

52.1

Transport and storage

59.2

55.5

-8.8

Communication services

38.0

31.6

-7.7

Finance and insurance

3.2

1.9

-3.6

Property and business services

20.1

22.7

68.3

Government administration and defence

28.9

21.6

-14.9

Education

10.5

6.9

-9.7

Health and community services

24.9

19.9

2.5

Cultural and recreational services

21.7

20.2

9.9

Personal and other services

42.1

36.9

10.6

Total

40.6

35.7

102.5

(a) Increase or decrease in the number of blue-collar employees within the industry division.

Source: Labour Force Survey (unpublished data).

The effect on occupationsAll these broad patterns of industrial change have an effect on the jobs available today. This employment shift has, in general, reduced the opportunities for blue-collar workers and increased the opportunities for white-collar workers.

Over the period 1985-86 to 1995-96 most employment growth occurred in white-collar occupations. The number of workers in white-collar jobs increased by about one million while the number in blue-collar jobs increased by about 100,000. This difference was spread across most industries, with nearly all industries having a reduced proportion of blue-collar workers. The electricity, gas and water supply and the government administration and defence industries experienced proportionally the largest decreases: 15 percentage points and 7 percentage points respectively over the ten-year period. However, it was the manufacturing sector that actually lost the most blue-collar jobs over the period (71,200).

The top ten fastest-growing occupation groups between 1985-86 and 1995-96 reflect the increased demand for white-collar workers as opposed to blue-collar workers. The greatest percentage growth (an increase of 91% or 102,800 workers) occurred in the personal service worker classification (this group includes child-care workers; enrolled nurses; dental nurses; home companions and aides; travel stewards and tourist guides). In rank order, the next four fastest growing occupations were business professionals (90%, 143,600 more workers); medical and science technical officers and technicians (86%, 18,400 more workers); miscellaneous professionals, which includes economists, psychologists, librarians, education researchers and other social scientists (59%, 21,500 more workers); social professionals, which includes social workers, counsellors, lawyers and ministers of religion (51%, 26,000 more workers).

Conversely, the majority of the occupation groups in which employment shrank over the same period were low-skilled occupations or those that have been affected by the impact of technological and economic change. The greatest proportional decrease in employment occurred among miscellaneous clerks such as teachers aides; personnel clerks; legal and related clerks; and postal clerks and officers. This group had declined by 41% (70,800 fewer workers). The next four occupation groups in which the relative number of workers decreased the most were construction and mining labourers which decreased by 19% (26,100 fewer workers); metal fitting and machine tradespersons decreased by 15% (19,400 fewer workers); machine operators decreased by 13% (20,700 workers) and farmers and farm managers by 11% (29,200 workers).

The demand for workers with particular skills is reflected in the relative distribution of previous occupations among unemployed people. In general, unemployed people with previous occupations that required high skills represented the minority of unemployed people while those with lower skill levels represented the majority of unemployed people.

TOP 10 FASTEST GROWING OCCUPATION GROUPS(a), 1986-87 TO 1995-96

Change between 1986-87 and 1995-96

Number of workers

Percentage change

Occupation group

'000

%

Personal service workers

102.8

91.3

Business professionals

143.6

89.9

Medical and science technical officers and technicians

18.4

85.8

Miscellaneous professionals

21.5

58.8

Social professionals

26.0

51.2

Data processing and business machine operators

39.5

49.6

Other teachers and instructors

39.9

48.8

Managing supervisors (other business)

36.5

43.8

Tellers, cashiers and ticket salespersons

50.9

42.5

Receptionists, telephonists and messengers

68.8

41.8

(a) Minor occupation groups of the Australian Standard Classification of Occupations.

Source: Labour Force Survey (unpublished data).

TOP 10 FASTEST SHRINKING OCCUPATION GROUPS(a), 1986-87 TO 1995-96

Change between 1986-87 and 1995-96

Number of workers

Percentage change

Occupation group

'000

%

Miscellaneous clerks

-70.8

-41.3

Construction and mining labourers

-26.1

-19.0

Metal fitting and machine tradespersons

-19.4

-15.1

Machine operators

-20.7

-13.0

Farmers and farm managers

-29.2

-11.1

Stenographers and typists

-22.9

-8.8

Stationary plant operators

-5.1

-8.0

Engineering and building associates and technicians

-6.3

-7.7

Printing tradespersons

-1.8

-4.4

Other metal tradespersons

-4.4

-4.0

(a) Minor occupation groups of the Australian Standard Classification of Occupations.

(a) For unemployed people who had worked for two weeks or more in full-time employment in the last 2 years.

Source: Labour Force Survey (unpublished data)

The future?Over recent years government education policy has been directed at encouraging students to complete their secondary education and to go on to tertiary level studies. The relatively high Year 12 apparent school retention rates in the 1990s compared with the 1980s, and the increasing number of students completing tertiary studies reflects the success of these policies (see Education - national summary table). This will result in a more highly skilled labour force over the coming decade (see Australian Social Trends 1997, Education and employment).

Some organisations have examined aspects of the likely future labour force. The then Department of Employment, Education and Training (DEET) published a report6 making projections of the future labour force and the former Economic Planning and Advisory Commission (EPAC) issued a report7 that comments on the major issues facing the labour market of the future. The DEET report concluded that continuing globalisation of the economy would be a major influence on the Australian labour force. Manufacturing would need to become increasingly competitive by improving productivity, but it would not provide major new opportunities for employment. Those employed in the manufacturing industries would need to become more skilled or update their skills to cope with new technologies. The report suggested that the service sector would continue its dominant role in providing new jobs.